Can you keep part of paid deposit for tenant subsequently backing out of signing lease?

[shnazdabling]

What is the name of your state? New to the landlord game. Had something happen that I am guessing wont be the last time so looking for some advice.

Single family home, North Carolina.

Prospective Tenant, currently out of state and moving to NC because of new job, is using a Real Estate Agent here in NC. Once we got in contact with the tenant directly via email, while still copying the Real Estate Agent throughout, we proceeded with application, background check, etc (approved). Tenant paid deposit through Cozy. Upon receipt of notice from bank Tenant sent funds (pending processing) Sent tentant lease while waiting for funds of Security deposit to clear. Tenants agent never added to any of the communication throughout. We took property off the market on the same day we received notice tentant requested bank transfer for the security deposit.

Tenant is now backing out without signing lease. Only explanation that it is on Real Estate Agents advice. My gut tells me that its retaliatory on the agents behalf because I told their agent there was no referral fee early in the process. I can't prove that it's retaliatory, so I wont bother.

Question is, can I keep part of the security deposit for tenant backing out to recoup losses, legally, considering I took property off the market? If so, what is ethically appropriate from a business standard standpoint?

I have told three prospects it was off the market after the tenant in question sent funds (via ACH). I've lost about a week.

Any chance to site statutes or links to websites for reference would be incredible. I wasnt able to find anything.

Thanks for the advice.

 

[PayrollHRGuy]

Under what conditions did you accept the deposit? Was this the normal deposit that would be made to rent the home or was it a hold deposit?

 

[shnazdabling]

It was not listed as a hold deposit specifically. It was stated as a Security deposit. They have not paid first months rent yet either. So odd they suddenly stopped dead in the process. They were originally pushing me to move as fast as possible.

 

[PayrollHRGuy]

• 
  
  
  • § 42-51. Permitted uses of the deposit.
  • (a) Security deposits for residential dwelling units shall be permitted only for the following:
  • 
    (1) The tenant's possible nonpayment of rent and costs for water or sewer services provided pursuant to G.S. 62-110(g) and electric service pursuant to G.S. 62-110(h).
  • (2) Damage to the premises, including damage to or destruction of smoke alarms or carbon monoxide alarms. (3) Damages as the result of the nonfulfillment of the rental period, except where the tenant terminated the rental agreement under G.S. 42-45, G.S. 42-45.1, or because the tenant was forced to leave the property because of the landlord's violation of Article 2A of Chapter 42 of the General Statutes or was constructively evicted by the landlord's violation of G.S. 42-42(a).
    
    
    
    
    
  • 
    (4) Any unpaid bills that become a lien against the demised property due to the tenant's occupancy.
    
  • 
    (5) The costs of re-renting the premises after breach by the tenant, including any reasonable fees or commissions paid by the landlord to a licensed real estate broker to re-rent the premises.
    
  • 
    (6) The costs of removal and storage of the tenant's property after a summary ejectment proceeding.
    
  • 
    (7) Court costs.
    
  • 
    (8) Any fee permitted by G.S. 42-46.
    
  • (b) The security deposit shall not exceed an amount equal to two weeks' rent if a
  • tenancy is week to week, one and one-half months' rent if a tenancy is month to month, and two months' rent for terms greater than month to month. These deposits must be fully accounted for by the landlord as set forth in G.S. 42-52. (1977, c. 914, s. 1; 1983, c. 672, s. 3; 2001-502, s. 5; 2004-143, s. 6; 2011-252, s. 3; 2012-17, s. 4; 2012-194, s. 59(a), (b).)
  
  
  

 

[PayrollHRGuy]

You might want to follow this link and read up on all of the NC LL/Tenant Laws.

https://mobile.ncleg.net/New/Statutes/BrowseStatutes.aspx?chapter=0042

 

[adjusterjack]

Question is, can I keep part of the security deposit for tenant backing out to recoup losses, legally, considering I took property off the market? If so, what is ethically appropriate from a business standard standpoint?

Seems like you counted your chickens before they hatched. You didn't have a contract. You didn't specify what the deposit was for and whether it was refundable or not. I'm guessing you didn't get a move in date. You should have been taking back up applicants until the new tenant was nailed down.

You've made many mistakes that you'll need to correct when you put the place back on the market.

Meantime, with so many errors, I don't think keeping all or part of the deposit will hold up in court. I suggest you return it and eat your loss just like many of us landlords and former landlords have done before you when we screwed things up.

One more thing, you've just learned why you should never deal through real estate agents. They are whores for the commission or fee and will sink your boat every time if they don't get one.